Identify the likely problems that can be encountered in the compilation of National Income Account in Nigeria.

Answer Details

The compilation of National Income Accounts in Nigeria faces several problems:

• Inadequate and unreliable data: statistics are scarce, incomplete or inaccurate.
• Large subsistence sector: much output (for example food grown and consumed at home) is not sold in the market, so it is hard to value.
• Illiteracy: many producers keep no records and cannot supply accurate figures.
• Problem of double counting: difficulty in separating final goods from intermediate goods can lead to values being counted more than once.
• Large informal sector: many small traders and artisans are outside official records.
• Shortage of trained personnel: too few qualified statisticians to gather and process the data.
• Problem of transfer payments: deciding what to include or exclude (pensions, gifts) is difficult.
• Income earned abroad and by foreigners: hard to measure accurately.